Why are the gas prices so high?

I get gas every two weeks and it jumped from 1.80 to 1.85/gal from the last time I went to get gas to today. Is it going to stop? What are the solutions to the problem? Don't we have any leverage in OPEC now that Iraq is American-controlled territory? Why are the prices so high to begin with?

continued problems in the ME...namely a little place called Iraq...
Venezuela has a strongman that is pissing the US off...
OPEC is cutting production....

Underlying issue: peak oil... ;)

high and supply is low and shrinking.

This was in today's Toronto Globe and Mail Report on Business.

Oil market tightness is likely long term

By JEFFREY RUBIN
Monday, March 15, 2004 - Page B4

If the depletionists are right, global production of conventional crude oil should be peaking within the next couple of years, at somewhere in the neighbourhood of 65 million barrels a day.

Recent production estimates from the International Energy Agency show global oil production in January is already well through that mark at 82 million barrels. But the IEA numbers include eight million barrels a day of non-conventional production such as oil sands and deep-water oil, and another eight million to nine million barrels of liquefied natural gas.

Strip out unconventional sources of supply, and crude production is hovering around 65 million barrels, where it has been for the past four years. Has the world already seen the peak in conventional crude production?

Not only has conventional production not grown over the past four years, but there is virtually no spare capacity left among producers belonging to the Organization of Petroleum Exporting Countries. Excluding the brief period when Kuwaiti and Iraqi oil wells were ablaze during the Persian Gulf war, OPEC has not operated with such spare capacity -- 2.7 million barrels a day at present -- in nearly 30 years.

More.....

The good news is used Hummers will soon be going dirt cheap if you've got a couple horses or an ox you can harness up to the front of it.


From the web site www.fuh2.com

This weekend my wife and I looked at cars to replace our VW. While at the local Honda dealership I had a conversation with a sales guy about H2s. It seems that a number of H2 owners have been looking to trade in their H2s for more wallet-friendly cars but car dealers are not offering a good trade in value on the H2. The salesman said that he had personally talked with three owners who were frantic to get out of their H2s but could not afford to because they were upside-down on their pay-off to trade in ratio. He said that one owner was mad because the dealership only offered him half what he said would be his minimum acceptable trade-in value. Ha ha ha ha ha ha ha ha! FUH2!

http://www.fuh2.com/submissions.php (the last entry at the bottom)

Prices are only going to get higher--perhaps $3.00 in some areas by this summer.

Factor one: The US invasion of Iraq. Before the war, we were purchasing a few million barrels a day from Iraq. Now, we get bupkis. Most of it is still getting spilled on the sand, or burned in a pipeline fire.

Factor two: OPEC isn't recognizing any of the representives the US would send to their meetings. They have stated that they are going to wait until they are satisfied that a legitimate government is in place in Iraq.

Factor three: Bush's so-called 'strong dollar' policy of spending us into oblivion has been making the dollar drop like a rock. Something like 40% against the Euro since he got into office. Since oil is traded in dollars, OPEC has been raising the price in dollars just to stay even when the dollar drops. The price of oil in Euros has remained remarkably stable since 2002. It's actually become cheaper in Euros since 2001.

Factor four: China and India are just starting to enjoy automobiles. There are 2 billion people in those countries alone. India's middle class is as large as the entire US population. Now that many of them are getting good jobs, they can afford things like cars. Global demand for oil has been skyrocketing.

Factor five: Oil production is peaking, meaning that they are pumping as much as they can right now. They can't increase production more than what they are getting out of the ground now. Future prospects don't look good either. They haven't discovered a major new oil deposit in several decades.

Add them up together, and the price of gas goes up.

they could lower it a few month's before the election to help Bush. Can't argue with your logic...mine was based on pure passionate disgust for the slimness of BushCo and the oil corporations (along with my hatred of their constant deception).

Your post makes more sense.

After adjusting for inflation, though, oil and gas prices are still well below what they were in the early 1980s, the Energy Department says.

"Gas prices are up, but it's nowhere near the fear and loathing of the 1970s and early 1980s," says George Pipas, sales analysis manager for Ford Motor. "It will take European prices of around $5 per gallon to really dampen SUV love."

Pipas and others in the industry say consumers have become conditioned to periodic spikes in fuel prices and that the desire for SUVs outweighs concern about the cost of filling them up. http://www.usatoday.com/money/autos/2004-03-18-bigsuvs_x.htm

A survey by CNW Marketing Research shows that about a third of consumers would consider eventually buying a more fuel-efficient vehicle if gas prices hit $3.25 a gallon. Not until gas reached $3.75 a gallon would a third of those surveyed say they would immediately consider trading in for a more fuel-efficient vehicle

The NYT's has an inflation adjusted graph showing how inexpensive gas is--- http://www.nytimes.com/2004/03/18/business/18GAS.html?ex=1080190800&en=851eb79ef600c803&ei=5062&partner=GOOGLE

this happens every election year. They gouge until they start hurting sales/profits then back it down before the public can form a mob. Government of, by and for the who?